Thank you. Thank you. At this time, we will be conducting a question and answer session. You may press 2 if you would like to remove your question from the queue. As a reminder, we ask that you please limit yourself to 2 questions and re-queue if necessary. 1 moment please while we poll for questions. Our first question comes from Samir Khanal with Bank of America. Your line is now live.

Yes, good afternoon everybody. I guess Joe, maybe to start off on the LA front. How quickly can you capture the revenue from LA? Maybe just walk us through the math for this year and then into next year as we think about the upside.

Hey, Samir. Good to hear from you. So on LA in the state of emergency there, we did have that factored into our original guidance as a minus 80 basis point drag. As I mentioned in the prepared remarks, 30 basis points of that 90 basis point revenue increase in our guidance is going to come from LA. We are anticipating some ability to start recapturing as of the expiration on July 1. We are going to take a pretty measured and phased approach to that. it is not the idea to go out there and go to all customers, either new or existing, and move them back to market rates. But we are going to over time start to recapture that As a reminder, we lost about 70 basis points of same store revenue growth in 2025 another 50 net this year. So that gives you an idea of given the demand and supply environment out there, which remains really robust, kind of what we left on the table from the state of emergency and may be able to recapture in the future.

Okay. And then I guess my second question is on NSA. You mentioned expansion opportunities. That you are finding. And again, I know it is early, maybe expand on that and have you identified at this point any sort of incremental revenue or cost synergies beyond sort of the original underwriting? Thanks.

Yeah. Samir, it is Tom. I will cover that. I think as it relates to the capital opportunities, I think there is really a couple that we have identified that I will share today in collaboration with the NSA team over that integration planning period. The first is expansions that I highlighted. So there is definitely some opportunities for expansions on some of their existing assets and, we are excited about that. The development team is spending time there. Joe and I just greenlit an expansion at our most recent investment committee this week. So getting moving on those and that value creation will come over the next several years. The second component is more-- and this is driven by an ability to spend some R&M dollars and get more units online. So we found about 14 thousand units and the NSA team pointed those out to us. That we can bring back online and which will drive incremental inventory as we move through the second half of 2026. The second part of your question related to overall synergy expectations, I would say our confidence continues to grow. You know, you heard from me just a few moments ago around we were able to get our systems in place overnight. And that enabled us to have our first visibility in terms of the operating, situations, and then also give our teams tools and the unified team moving forward those tools to start driving the business. And so we have confidence both top line, bottom line, ancillary, and the like from here and we expect to execute on that plan along those same lines of the road map that Joe provided back in March but have more confidence in terms of the execution on that now that we have the visibility and the teams in place.

Thank you. Our next question comes from Michael Goldsmith with UBS. Your line is now live.

Good afternoon. Thanks a lot for taking my questions. 1 will be more near term, 1 will be more kind of intermediate long term. But maybe on the near term, can you provide an update on July and how that how that is reflected in your guidance where you expect kind of true same-store revenue growth to accelerate slightly through the back half?

Yeah. So I will take the first piece of that and then the guidance question Joe can take. We have seen improved core performances as recently highlighted on the call. As we think about move in rents, for instance, move-in rents were growing 1.6% in the second quarter compared to a decline of -2.4% in the first quarter. Promotions were a little higher in the second quarter but that was really a function of April and a different promotional strategy in the month of April. But if you look at June, for instance, where we had more consistent promotions year over year, moving rents were up 4%, and the strongest month in the quarter. As it relates to July, trends continued occupancy up about 30 basis points year over year, Churn continues to be lower, which is a bright spot in the second quarter. And move in rents, again, positive, maintaining the momentum from June. So I think your follow on question could be, so what is driving that? And I think it is a combination of several things. 1, steady demand, from the customer base across the country to reducing supply as we see new competitive supply entering the market slowing down. And then the third is some of the customer experience initiatives that we are really driving. Sentiments up, as we highlighted. Churn continues to be lower, which gives us more pricing power for new customers coming in. And the team in place continues to test and learn and drive the business.

In terms of second half-- yep. No. Go keep it going. Part of your question there, Michael.

Was around expectations for the second half. Embedded in guidance. I do not know, Joe, if you want to cover that. Yeah. So second half trajectory, I think, is a consistently messaged We did expect 2Q to be the low point for the year as we faced kind of toughest comps from a revenue perspective. And with the increased momentum that Tom was talking about, it does start to show up a little bit in that year over year revenue growth number. Obviously, that is a lagged number that takes in the prior 4 quarters. But we do expect to go off of that minus 60 bps in 2Q, see that start to get a little bit better in 3Q, then even turn positive in the fourth quarter. So we have a nice trajectory there, but I think it is the kind of critical piece is the outlook beyond that and the earn in that we are starting to build with some of the recent momentum of ECRIs continuing to contribute the existing customer staying with us longer, obviously, occupancy coming up a little bit, and that is momentum that we are seeing on new move in rates. So hopefully, it comes through that we are excited about the momentum we are seeing here in the second half and what that holds for the future.

Got it. And then as my-- here, right? Just as you said, Joe, right, it sounds like near term, you have got a little momentum Things getting a little bit better, but, you know, you have done a lot of things that are setting yourself up for the intermediate term with the NSA acquisition PS Canada, you are you are acquiring more lease up, LA gets better, you have got development. So it is really the public storage story now that, like, things are getting a little bit better in near term, but you are setting yourselves up for a, a better 2027 and a big 2028 or some combination of the out years where all of this is going to kind of come together and drive more powerful growth?

Yeah, Michael. I think you covered that actually pretty well. What we are building, putting the building blocks in place. We have more of them in place now than we have in the past. And we will continue to do that. And we are encouraged by the core trends we are seeing in the business as well.

Got it. Thank you very much. Good luck in the back half.

Thanks, Mike. Our next question comes from Nicholas Philip Yulico with Scotiabank. Your line is now live.

Hello. This is, Viktor Fediv on with Nick. A question on your move out rate trajectory. So to what extent these 3.5% year over year decline was being driven by mix specifically higher in place rent and longer tenured customers remaining in storage, and therefore, representing a smaller share of move out? Or are there also unit size or market level mix shift affecting the average rate?

Yeah. I think it is a combination of a couple things. 1, what you just highlighted around longer term tenants continuing to stay with us, which we are seeing in the portfolio and churn is down which is helpful. No question. And then the second thing is, is that is a lagging indicator of where move in rents were as well. And so as we move higher here in move in rents, you would expect to see that decline start to moderate as we move forward from here.

But certainly an additive component in the second quarter. Good. And then as a second question, follow-up on your integration plan because historically NSA has been operating with lower churn than PS. So as you transition the portfolio into your PSNext platform, do you expect to quickly align NSA with PSA's revenue management approach? Or are there any aspects of NSA pricing strategy that you believe is worth preserving, particularly given differences in customer mix and then submarket characteristics?

I think there is maybe 2 components to that question. I think the first is certainly geographically and from a customer base standpoint, there is differences between where churn is. But I think secondly, we are excited to bring those properties into the PSNEXT operating platform and drive performance, and we think that there is opportunity but probably first and foremost around revenues. We think about occupancy as well as rental rate opportunities as we add the properties to our portfolio, rebrand them, and drive performance there. And so a combination of both new customer, existing customer, and new marketing opportunities all playing a part there.

Thank you. Our next question comes from Ronald Kamdem with Morgan Stanley. Your line is now live.

Hey. Great. Just taking a step back and trying to get a better sense of just top of the funnel demand and some of the indicators that you guys are looking at this point. I think you have talked about sort of the narrative of improving demand and was hoping you could provide more commentary on what you are seeing in the portfolio and by market and specifically the slope of that improvement. Thanks.

Sure. On the demand front, would characterize demand as pretty steady as we move through this year and certainly feels steadier this year than what we experienced last year, which is encouraging. And I think some of the use cases that we have consistently spoken about be it, you know, existing home sales that often comes up on these calls, have been pretty consistent, on a year over year basis, and we are seeing pretty consistent customer use, from that use case. But also, a continued strength from customers that have ran out of space at home which continues to be a higher, proportion, and is healthy there. So no real things that I would highlight that are new as it relates to use cases or otherwise, but I would say, steady demand. The second component of your question is a good 1 to highlight, which is we have a number of markets, about half the portfolio that continues to perform really quite well. And I would characterize them as a stronger markets, and I would rattle markets off, as I have in the past like Minneapolis Chicago, San Francisco, Boston, DC, they are all growing, you know, 3% to 5% same-store revenue growth. And seeing good trends there. And then at the same time, we have Sunbelt markets that continue to sequentially improve. And those markets have declined from a revenue standpoint over the last several years. We continue to see that this year. Given the really difficult comps that they had and the demand that they experienced during 2021 and 2022, but also the new supply that went to try to match that demand. And that new supply is being absorbed, and we are seeing sequential improvements in many of those markets. from here. So I would say encouraging trends across both sets of markets as it relates to the operating fundamentals I spoke to just a few minutes ago. And then you put the LA component that Joe spoke to which will be an additive component to revenue growth as we move really into 2027, which is encouraging.

Great. And then my second question, just going back to the acquisitions I was just hoping you I know there is the acquisition team has expanded, and you have talked about sort of the focus there. But if you think about just going forward, just can you give us a sense of like what you guys are doing differently than you have in the past to sort of lead to this outcome where you can increase acquisition volumes and presumably at attractive returns? Thanks.

Yeah. Thanks, Ronald. I think that there is a couple of things that I would highlight, and we have highlighted in the past. 1, we have significant capital resources year-in and year-out, and that gives us an ability to be active and to compound our per share earnings growth opportunity. The second is the operating platform gives us an ability to earn more cash flow from those assets as we put them on the platform. So we have been investing in the team as well as tools to drive more activity, more precision, shrinking deal timelines with a real micro market targeting focus, which has resulted in some attractive activity year to date. As you highlighted about $450 million of acquisitions year to date, about 70% of that is off market. And a meaningful portion of that is also lease up given the confidence we have in the operating platform, we are not shying away from that. Which is additive to future earnings growth from here. On the development side, we did increase the size of the pipeline this quarter. We continue to target micro markets around the country with the national platform and try to maintain or grow that platform while the rest of the competitive supply dynamics continue to moderate. So a multi pronged approach to the capital deployment and, you know, I have challenged the team to continue to be active and find those opportunities as we invest in the platform. this year, and it is encouraging to see the results year to date.

Thank you. Our next question comes from Spenser Bowes Glimcher with Green Street Advisors. Your line is now live.

Good morning and thanks for taking my questions. I know you just briefly mentioned this, I would just like to quickly touch base on it. Again. But, you know, there was some broader commentary towards the latter half of last year, you know, signaling that markets located in the Sunbelt were reaching an inflection point you know? But just looking at your disclosures here, you know, I am seeing Tampa down 10% on NOI, Miami at 3%, Atlanta down 6%. Can you just walk us through what you are seeing in these markets? And, you know, why are they continuing to lag? I guess? Yeah.

Sure. I can, maybe provide some incremental commentary on certain of that. I think you know, I hit the big picture around some of the tough comps and new supply. I would certainly put Tampa in that camp. Tampa also had a benefit several years ago, from some storm activity, which led to increased customer demand that we are now-- have been lapping. But I think big picture sequentially, we have seen improvement. In most of the Sunbelt markets, maybe not in Tampa. And I think that is been driven really over the last 12 months or so, and we expect to continue. But revenues continue to decline. So while there is improvement, it continues to be uneven month over month but the direction is clear. And so as we look at those markets, some of which you highlighted, but I would put some of the Texas markets in that camp, Orlando, Atlanta, Charlotte, for instance, all working through pretty similar characteristics all seeing sequential improvement in the operating metrics, but we are not expecting those to improve dramatically. Overnight. That absorption is taking place. And as we move through the year, we are still expecting as we finish this year that those markets are still in negative territory. As we finish 2026 and head into 2027. But the direction is clear and the sequential improvement, is occurring.

Great. Thanks for the color. And as another follow-up, You guys achieved a positive move in rate growth around 1.6%. But can you perhaps highlight if this has led to any changes in terms of your ECRI program?

Yeah. it is a good question. Yeah. I think on the ECRI program specifically, pretty consistent strategies year over year. As move in rents do move higher, that reduces the replacement cost component of that modeling and optimization. Which should lead to stronger ECRI contributions over time. Obviously, 1.6% growth in the quarter is modest growth. But as we see that move higher over time, only additive to the ECRI program.

Great. Thanks. that is it for me.

Our next question comes from Juan Carlos Sanabria with BMO Capital Markets. Your line is now live.

Hi. Thanks for the time. Just curious on the acceleration that is assumed in same store revenue in the back half and turning positive in the fourth quarter. Would that hold that assumption or that guidance were it not for the sunsetting of the LA rent restrictions coming off. If we strip out LA, would you still expect positive same store revenue in the fourth quarter?

Yeah. Hey, Juan. it is Joe. It would be pretty close. I do think, yeah, LA with the acceleration there and the easier comps that now face with the revenue momentum that we are seeing right now post July 1. LA will get to a positive year over year revenue growth potentially in fourth quarter. So it is helpful to the portfolio So it would be close, but we do have a big component of the portfolio in those Midwest and coastal markets. it is performing very well and continues to put up 2%, 3%, and 4% revenue growth. So you have that, and then we do have a shift in momentum as Tom talked about in the Sunbelt where second derivatives get better. You are probably not going to see the Sunbelt as a whole get back to positive in the fourth quarter. But it is definitely moving in the right direction relative to where it is at today. So LA is additive to that, but it is not the sole driver of it.

Great. And then just on the churn point, of that coming down and the focus on customer service, I guess, with all the analytics and data you guys are now running and taking advantage of I guess, what would you highlight as kind of the key things in the customer's mind is improving that length of stay or limiting churn? Like, what has been most effective as you have more focused on that customer centric approach?

Yeah. I think there is a few things. 1, from a strategic standpoint, that is been a big focus area really for all the teams across the company as we are in a more competitive landscape today, and frankly, customers expect more. If you had if I had to pick 1 thing as you are highlighting that would be an important driver of that, I would say it is listening to our customers. So we have we have put in new survey programs. We used to get 2,000 to 3 thousand surveys a month. We are getting more like 90 thousand surveys a month now, and that is clearly gonna grow with the NSA portfolio that is coming on. So listening to our customers, and getting more of that feedback enables the team to resolve those concerns and provide a better customer experience, for the customers our properties. And the focus is around a reliable customer experience, And when there are issues that come up, we can seek to resolve them faster this year than we did last year. And hopefully, even more so moving forward with some of the tools that we are putting in place and the like. So I would say that it is probably listening to our customers more, and we are seeing that benefit play out in customer sentiment scores within those surveys.

Thank you. Our next question comes from Ravi Vijay Vaidya with Mizuho. Your line is now live.

Hi there. Thank you for taking my question. Can you discuss the decision to raise equity here? You have ample leverage capacity over $600 million in free cash flow. Why raise now? And how do you think about your various capital sources?

Hey, Ravi. So we are definitely fortunate in terms of the various capital sources. Between the excess free cash flow that we consistently talk about, the balance sheet capacity, having the best credit rating in the space and the ability to borrow at relatively low cost. We looked at ATM as just another arrow in that quiver. In terms of the ability to keep that flywheel going. If you think about the costs that we are raising at, combined with leverage, we are about a 5% cost of capital. You look at where we are deploying while we are deploying into more lease up assets, which have a yield below that and are slightly dilutive near term, We are gonna grow those up to the high sixes, low sevens over time as they stabilize. As you think about that relative to a cost of equity, we are putting on the board over a 100 basis points of incremental spread and therefore compounding that earnings per share profile. So we thought it made sense in terms of cost, It was on in moderation in terms of the sizing. But we did have an identified use in terms of the acquisition momentum as well as increased development lending that we are seeing.

Got it. that is very helpful color. Just 1 more here. I wanted to follow-up again on the on the move in rates. First quarter since 3Q 2022 that they have turned positive Were there any particular markets that drove this, and maybe what are some of the markets that are we are still seeing some difficulty with pricing power?

Thank you. I would not highlight 1 particular market. I would see a lot of the core improvement that we are speaking to, and you have heard it from both myself and Joe. Todd, has been more broad based and encouraging. But in terms of stronger markets on move and rate growth, I would highlight Los Angeles, San Francisco, both healthy, Philadelphia, Boston, Minneapolis, a lot of the markets that we highlighted that we characterize in that coastal and Midwest. Characterization really leading the way with healthy move in rate growth And then some of the Sunbelt markets that continue to be in negative place year over year as they work through, some of the new supply that is been delivered there. And so while that absorption, is taking place, that does put some pressure on move in rents. And while the sequential improvement is there, in many cases, they are still down year over year at this point.

Thank you. Appreciate it. Our next question comes from Brad Heffern with RBC Capital Markets. Your line is now live.

Yes. Hey, everybody. Thanks for the questions. On LA, I am wondering how you think about the extent to which the lack of ECRIs distorted the market Presumably, tenants stayed longer and occupancy was higher because of the lack of ECRIs So do you think we will see a period of elevated turnover that potentially offset some of the benefit of the ECRIs coming back? Or is that not meaningful in your mind?

I would say on net, being able to charge market rents is a positive to overall revenue. You are going to see a little bit of a shift as you would anticipate with a little bit more rate growth and a little bit less occupancy growth. And so, yeah, occupancy remains very healthy in LA. We are not expecting a material shift there. But as we have seen when prior state of emergencies have rolled off, you are likely to see a little bit of an occupancy give up. And the flip side is you will get more rate and a more balanced growth profile between rate and occupancy.

Okay. Got it. Thanks for that. And then, Joe, on the guidance, you called out the 2¢ of benefit from the deals. I think that is really attributable to PS Canada. So I was just wondering is there any net impact on the guide specifically from NSA being added? Know the original guidance was for it to be neutral, but just checking if anything has changed there.

Yeah. Hey, Brad. No change on that front. So the original communications in terms of core performance related to both NSA and PS Canada was that they would be neutral to the earnings profile this year. Obviously, expect a pretty material lift and go forward years. And as Tom talked about, commission on that front has only increased with opportunities that we see in front of us. So the only adjustment we made relative to the 2 transactions is that 2 pennies for the back half of the year. that is really because we have financed NSA and underwrote NSA in USD financing. And with the investment in PS Canada, we have 900 million of OP units that we can put in that investment hedge against to hedge against that equity exposure. So we are gonna be able to swap upon close some of that NSA debt into Canadian financing. 100 basis points better rate So they will pick up on a run rate basis, maybe 4 or 5 pennies going forward. So at this time, that is the only change related to the 2 transactions, given we are only 1 weekend into to NSA and still have not closed on PS Canada.

Okay. Thanks. Our next question comes from Michael Anderson Griffin with Evercore. Your line is now live.

Great. Thanks. Maybe just on the same store expense guide for the year. I think the revised midpoint implies about 3.5% growth in the back half of the year and Joe, I know you walked through some of the puts and takes with some of the line items, particularly as it relates to property taxes in the second quarter. But anything else we should just be cognizant of? Are there rollout expenses associated with PS Next that might flow through and pressure expenses in the near term? Or how should we think about that?

Yeah. So couple of things to highlight there. Number 1, just from a broader context, going up to 2.5% expense growth, still subinflationary is a really good outcome for the team, especially after coming off 2% last year. So overall, a couple of really good years of expense containment as you have seen out of the team in the past. In terms of the increase that we are seeing, you know, plus or minus 35 basis points there on the guidance, that is really driven by both the labor side within direct expenses as well as the labor piece in indirect all of which is related to incentive compensation. If you recall back in February when we rolled out PS 4.0, was a big focus on alignment throughout the organization. And putting additional incentives on the table down to our property managers, all the way up through the organization. And so 2Q reflected some of that with increased cost So we are just flowing that through the rest of the year. that is really the only driver we are seeing differently. And then I will say, just on cadence, you know, 3Q is probably our toughest expense comp for the year. So in terms of that mid threes back half number, you will see 3Q come in a little bit higher and then revert lower in the fourth quarter.

Thanks, Joe. that is certainly some helpful context. And then maybe just 1 more on the acquisition opportunity set. Obviously, you have got the PS Canada deal to close in the third quarter this year. I know you guys have looked at other markets internationally. I think Australia is 1 that comes to mind. I mean, how do you view expansion and acquisition opportunities internationally versus domestically? It feels like Canada has a more favorable supply picture. I would imagine you would, you know, want to bolster that deal, close it before you continue to expand there. But just can you talk a little bit about the opportunity set between both international and domestic acquisition opportunities?

Sure. I think that there is, a few things I would highlight there. 1 is, you know, The US market continues to be the deepest pool of opportunity and the deepest storage market, no question globally. And it is 1 where we have a tremendous operating platform in place. And so that is going to always be really the bread and butter of where our team spends its time from a capital allocation standpoint. That said, there are some really interesting international markets, and you highlighted Australia. Obviously, we have acted on Canada, and we view those markets as both attractive from a fundamental standpoint as you highlight, but also as expanding the pie for capital allocation going forward. So we are adding Toronto, Vancouver and other Canadian markets to markets that we can think about acquiring and building in over time. And, you know, in Australia, we feel similarly around Sydney and Melbourne, and Brisbane down in Australia. And we are consistently looking for platforms in those markets where we can both buy an existing portfolio, and look to drive operating performance as well as expanding capital allocation opportunities. Canada certainly fits that bill and we are excited about adding that platform to the business here as we move through the second half.

Great. that is it for me. Thanks for the time. Thanks, Michael.

Our next question comes from Caitlin Burrows with Goldman Sachs. Your line is now live.

Hi there. Just 1 from me. I guess you mentioned a few times that demand has been steady, but you also mentioned earlier some confidence in demand growth as millennials and Gen Z age into the core range for storage use. So could you talk about this a bit more and when we could see demand actually pick up? I guess, have you started to see it from this group? And do you have any stats on maybe average age of your customer?

Yeah. Sure. that is a great question. So, as I noted earlier, you just repeated that, we are encouraged by what we are seeing. Millennials are our largest cohort of customers today, and they are using storage with a higher propensity than prior generations at the same age. And Gen z is following suit. So we are really encouraged by that activity as they age into our core usage years. And that is a tailwind that we view from a demand standpoint over the next 10 to 15 years. And 1 that we are excited about from a demand profile, across the country And it also informs how we think about our customer experience and how we are leaning into digital and AI, focused customer experience in addition to a strong on store experience. In terms of when we are gonna see it, I think we are seeing it today And you look at some of the fundamentals, you know, I highlighted that certainly over the last several years, we have been working through stabilization I think that I would consider where we are now, to towards the latter end of stabilization and into recovery as we see these leading operating metrics turn more positive. it is, been an uneven recovery but the direction is certainly clear. And if you look at occupancy moving forward, higher year over year, move in rents higher year over year. And as Joe mentioned, that is the first time we have seen both of those in positive territory since 2021. So that is encouraging and I think demonstrates the fact that we are seeing steady demand as we continue to move forward here through 2026.

Thank you. Our next question is from Brendan James Lynch with Barclays. Your line is now live.

Great. Thanks for taking my questions. Just a few questions on your past commentary from the call today. Tom, you mentioned that you have got participation in your surveys up to 90 thousand from just a few thousand a couple years ago. I would imagine this is really valuable data. So curious how you are incentivizing that participation to get such a high rate of responses.

Yeah. Actually, the answer is we are not incentivizing that on the ground. You know, we get a lot of customer visits kind of over time at the property and a portion of those customers are happy to share their points of view. And I think the shift is we have enabled more opportunities for them to share that feedback and we are listening. And responding to that. And that is happening at the property manager of the district manager level, with more of a customer focus. And the reaction from the customer base has been strong, and you can see that in some of the numbers that we highlighted today. But I think it is more of a different approach than it is a change in incentives.

Okay. Very good. And then, Joe, you mentioned savings in payroll. From your machine learning based staffing models. What does that entail? What change? And what is the magnitude of the difference?

Yeah. So that is been in process now for 3 or 4 years. In terms of really studying the dynamics at each and every property. Understanding the customer, the traffic flows, the attributes of each asset, the risk factors, the seasonality, student components, etcetera. And really knowing exactly what do we need to do from a staffing perspective. If you look start to finish and finish is still out there in the future, but start to today, we are down over 30 plus percent from a hours perspective. At the same time, we are giving individuals in the field a more fulfilling job, and increasing pay associated with that role. So it is not just about cutting the cost. it is just simply cutting hours and giving better responsibilities and capabilities to the field to manage those properties. In terms of this year, can see we were down about -1.8% in the quarter, 1.2% for the year. We would have actually expected that to be down a little bit more So the offset then comes in from what I mentioned earlier in terms of putting new incentives in place But we do expect there to be more to come in the future as we continue to find ways to be more efficient while continuing to deliver great customer service to our customers.

Great. Thank you. Our next question comes from Todd Michael Thomas with KeyBanc Capital Markets. Your line is now live.

Yes, hi, thanks. I wanted to ask about the increase in deal flow that you are seeing for some recently developed assets that might have lower initial yields. How big of an opportunity do you see this being for the company? And is there a threshold on how much lease up or development product the company is willing to add? I guess, how are you balancing near term dilution versus the longer term growth opportunity in those assets?

Yes, Todd, it is Tom. I think as we look at the opportunity set, it is between both assets that have been in place and are highly occupied as well as lease up assets. As I noted earlier, we are looking at targeting those micro markets where we want to add products, where we think demand and supply dynamics are going to be favorable. And, we will be strengthening the portfolio. And in many instances, those can be lease up opportunities. And those lease up are ones that if the team identifies them and we use some of the new data tools and the like, and we find them attractive, we have got a lot of confidence in terms of our operating ability to drive, lease up and operating performance from those assets once they are on our platform. And so we do not shy away from that operational execution that is required from those assets. And, you know, you are near term dilution associated with it, but the flip side is Joe just mentioned, you know, higher returns over time. And so, with that confidence in lease up at the micro market level, we are very comfortable with that near term dilution for longer term earnings growth. You know, that is a component of what we have done year to date and we will look to continue to be active on that over time. Alongside a more highly occupied properties that are a good fit for the portfolio.

Okay. it is helpful. And then, Tom, you talked about the, effort to grow both the lending platform and third party management. Can you speak to the opportunity there to accelerate those parts of the business in, you know, the future? What are the long-term goals? And should we expect a more rapid acceleration in those businesses in the near term or expect sort of a more steady growth or more gradual ramp in those, you know, segments of the business.

Hey, Todd. it is Joe. So while we have not put out public goals in terms of what we are trying to attain in terms of size of development book, size of lending book, or size of third party management. Your comment that we do see accelerated growth coming out of all 3 of those in the near term, is 100% factual. We think we have ability to add value in all 3 of those avenues. Similar to what we have done historically with the acquisition pipeline. So lending wise, yeah, we saw a little bit of incremental lending take place there in the second quarter. We would expect that to continue to probably accelerate through the rest of the year. And again, that has some different attributes there that provide value. there is obviously the rate and return upfront, but as I mentioned earlier, the ability to put our third party management platform on there, which is a benefit to ourselves as well as that owner and obviously increases the security of that lending that we do. We have access to tenant insurance through that lending platform. And then we get access to some of the assets where we bought, I believe, over 30 assets out of that platform over time. And so lending provides a whole slew of different opportunities. Same thing to say about third party management. We are going off a relatively low base, but the momentum in that team is fantastic. We have added a number of resources there from a business development and client service perspective. And I think we are really seeing the market react to the benefits of partnering with public storage what we can do for assets on our platform. And so some good momentum there, which we would expect that to drive additional profitability in the future as well.

Okay. Thank you. Our next question comes from Eric Wolfe with Citi. Your line is now live.

Eric, you might be on mute. Hey there. Think Nick was gonna ask the question, but I will just I will just jump in. I guess for NSA, I understand that, you know, you are guiding towards sort of core FFO neutral for the for the rest of the year. But I guess, are there specific like, or financial goals that you are trying to achieve over the next 1 to 2 quarters? I am just trying to understand if there is certain things that we should look out for going into the back half of the year to measure success, whether that is increased occupancy, margin moving up, expenses moving lower. Just some specifics around what would success look like for the back half of the year.

Yeah. I think there is a few things. So the first thing I would say is we were focused on a solid start to the integration. And so certainly, you are hearing that from us today. In unifying the teams as we operate from here. And then, you know, Joe gave you a pretty good road map as we look at 2027 and into 2028. When we announced this in March. And it is a combination of yes, expenses you would probably see earlier, but then you start to see tenant insurance, show up. And then revenue is probably the longest tail, but the biggest opportunity as we move forward from here. We are gonna take, a really a micro market focus strategy as it relates to the pricing opportunity from here. So you are not going to see us necessarily focus on occupancy over rate from a national standpoint, but that will be more driven by what we are seeing in the local market. As we view as a pretty balanced opportunity between taking a portfolio that is, you know, circa 85% occupied today, and moving higher with occupancy, but also wanting to capture that rate piece And depending on the submarket that it is in, the opportunities vary there. So for instance, there is lots of great MSA properties that we are looking at that have occupancy well over 90% today. So the opportunity there is around how do we drive rate, and look at expense opportunities over time at that property to drive NOI. The flip side is there is some properties that have lower occupancy, and so clearly, we need to lift those higher, but it will be more on a property by property, micro market basis not an overarching strategy. And I think maybe the last thing I would highlight here is something we highlighted at the call in March, which is the portfolio is really complementary to ours. And so there is the ability to add new geographies and new submarkets into what we are operating. And that gives us more degrees of freedom as we think about operating in those new marketplaces with those properties. Got it.

Thank you. Our next question is from Michael William Mueller with JPMorgan. Your line is now live.

Yes, hi. I guess going back to the move in rates being up 1.6% in Q2 and increasing to 4% in June. Was more of that improvement into June driven by kind of what is going on this year as opposed to, what was happening with the comp last year?

Yeah. I mean, the comps are certainly a component of this as you look at any given year, but I would not highlight anything particularly in June. And as I noted, we used a pretty similar pricing and promotion strategy in this June compared to last June. So nothing comp related that I would highlight. And, obviously, I am highlighting that continued into July as well. But that does not mean that every month is gonna be a consistent trend. 1 of the things we have seen over the last several years is that you do have some better months and some softer months, that plays into comps as well as current year performance. I think the confidence that you are hearing from us is that the overall direction is headed there, but it does not mean that every month is gonna be a step change, move as consistently moving.

Okay. And I know you talked about acquisitions. Quite a bit, but are you seeing any significant opportunities in Canada already?

You know, we are just getting to a place where we are going to be putting the closing touches here on that portfolio, and we are excited to work with the team to do that. And as we do that, we will certainly look at capital allocation opportunities alongside it. But the first focus is, the integration efforts and building the team there to drive that performance over time. But you will start to hear from us around international opportunities in Canada. I am certain of that over the next several years. Okay.

Thanks. We have reached the end of the question and answer session.

Would now like to turn the call back over to Tom Boyle for closing comments. Great. Thanks, operator, and thanks, everybody, for joining today. Michael characterized it pretty well. We have got a combination of core leading indicators operationally that we are encouraged by. As we move through 2026 and we are putting the building blocks in place and have more of them in place today than we have in the past. And so we are looking forward to providing updates to this group, as that execution takes place. Thanks very much for joining.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.